Carpenter’s Global Property Catastrophe Index Rises by 5% in January Renewals

January 10, 2020

Pricing corrections in the property catastrophe reinsurance market over the last few years have been localized and mitigated to some extent by sufficient levels of capacity, according to Guy Carpenter in its January reinsurance renewal report.

As a result, pricing adjustments for loss-affected programs in peak zones were significant in some cases, whereas non-loss-affected accounts in other geographies trended flat to marginally down, said Carpenter.

Analyzing global pricing trends, Carpenter noted that, given the weighting of peak zone limit up for renewal at Jan. 1, its property catastrophe rate-on-line (ROL) index rose by approximately 5 percent, which leaves the index near pricing levels recorded in 2015.

Increased pricing on loss-affected programs in U.S. zones where risk assessment is shifting was material to the movement in the broker’s global ROL index, said the broker’s report, titled “January 1, 2020 Reinsurance Renewal: An Asymmetrical Market.”

Click on graphic below to see an expanded view of Carpenter’s catastrophe ROL index for the last 10 years.

A key message from the Guy Carpenter renewal report is that property catastrophe renewals displayed an extremely wide degree of variation depending on program specifics such as losses, geographies and exposures.

These traits, along with the fact that the mix of loss-affected and non-loss-affected business up for renewal at Jan. 1 is more diverse than at mid-year, created a wide range of outcomes, including within regions.

For more details about Guy Carpenter’s reinsurance renewal report, see related story published on Jan. 6.

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